You can't decrease the size of the overall image without also decreasing the size of everything in that image, including text.
Explain to your client the only way to achieve the stated goal here is to rebuild the slides keeping safe margins in mind.
It's a very common problem that is best address by Microsoft adding a "Video Safe" feature in PowerPoint, where the user is simply not allowed to place anything outside title safe but a background. (But good luck getting that to happen.)
I'm not worried about reducing the size of the image, thats fine.
My problem is when i do (using Effect Controls>Scale), the image for some reason blurs really badly. The slighest change in scale immediately changes a nice sharp image to blurry. This is when i am viewing the Program output, as well as when it burns to DVD.
Is there anyway to reduce the footage size (zoom it, scale it, whatever the terminology shoudl be) to get it to fit into the safe margins?
How complex are the Powerpoint slides ?
Can you upload a sample clip ?
Maybe there is a way to slice it up and use layers to try to delete some empty space depending on what the slides look like.
There are probably several things going on here, and all of them are rather bad at maintaining high qualtiy type:
You have the raster Type in PowerPoint, which are designed to be viewed directly via that program, so are probably marginal in overall quality to begin with.
You have then done the capture, which was done from the computer screen. Is that correct, or did you do another form of capture there? Regardless, there is likely a generational loss in quality.
You are dealing with a limited number of pixels to describe the Type, and when you Scale, you are rearranging those pixels.
As others have suggested, the ultimate quality will be best, if the slides are recreated, exactly as is needed. Yes, that is more work, and depending on the slides, will take some time, but will produce higher quality and greater readability.
I agree with Jim, that MS needes to take Video into consideration, as going from PowerPoint to Video is more and more common. However, they likely see PowerPoint as the end of the delivery stream, where it is often just a short stop along the way.